Steps of M&A Advisory in Hungary

Introduction

M&A (mergers & acquisitions) advisory is crucial if an owner wants to sell their company or if an investor is considering acquiring a new business. In Hungary, the process of selling or acquiring a company is complex and can take months, sometimes even years. Therefore, expert support is indispensable to ensure a smooth transaction and to help the seller achieve the best possible terms.

In this article, we present how M&A advisory works in Hungary, what steps the process consists of, and what company owners should pay special attention to.

The process of selling a company is not only complex but also full of pitfalls. We covered this in detail in our other article: 10 Mistakes Commonly Made When Selling a Company, where we show the most frequent errors owners make and how to avoid them.

What is the essence of M&A advisory?

The goal of M&A advisory is to ensure that both parties – whether seller or investor – carry out the transaction safely and effectively. The advisor's role covers several key areas:

• Business valuation: determining the company's realistic market value.

• Transaction structure: designing the legal and financial framework of the deal.

• Finding buyers and investors: connecting with the right partner.

• Negotiation support: representing the client's interests and securing favorable terms.

In Hungary, the key role of an M&A advisor lies in combining local market knowledge with international experience. This is particularly important in Central and Eastern Europe, where investor expectations often differ from Western European practices.

Main steps of a company acquisition

Company acquisitions involve several stages, each requiring thorough preparation and professional guidance.

1. Preparation and business valuation

The first step is always a thorough assessment of the company. The M&A advisor performs financial, market, and strategic analysis to establish the company's realistic value. This is critical, as owners often expect a higher price while buyers aim for a lower one. Independent valuation helps prevent negotiations from stalling.

2. Identifying investors

Relying on an extensive network, the advisor identifies potential buyers genuinely interested in the company. In Hungary, alongside strategic buyers, private equity funds and international players are becoming increasingly active. Finding the right partner is decisive for the success of the transaction.

3. Due diligence process

During due diligence, the buyer thoroughly reviews the company: financial statements, contracts, legal risks, taxation. This stage is critical because any hidden issues (e.g., litigation, unpaid taxes) can reduce the company's value. A good advisor conducts preliminary checks to avoid unpleasant surprises for the seller.

4. Negotiations and signing

The final phase includes concrete negotiations and signing the agreement. One of the advisor's most important roles here is to protect the client's interests. This includes negotiating the price, setting payment terms, and defining guarantees and liabilities.

What should company owners pay attention to?

Selling a company is one of the most significant business decisions for many owners. Timing, preparation, and involving the right experts are all key factors.

• Realistic pricing: a common mistake is expecting too high a price. Professional valuation helps avoid failed deals due to unrealistic expectations.

• Transparency: buyers will perform due diligence. It's wise to organize financial statements, contracts, and legal documents in advance.

• Timing: market conditions greatly affect sales. In times of economic growth, higher prices can be achieved, while in recession, selling is much more difficult.

• Expert support: an experienced advisor is indispensable. Since owners are emotionally involved, they can easily make poor decisions without professional help.

To ensure a successful transaction, it's also worth knowing the common mistakes most owners make during sales. We discuss these in detail in our article: 10 Mistakes Commonly Made When Selling a Company.

How does an advisor help?

An advisor not only handles the technical details of the process but also acts as a strategic partner to the client.

• Market knowledge: understanding which investors are active in the region and on what terms.

• Negotiation experience: capable of arguing for a higher price and minimizing risks.

• Full process management: guiding the client from the initial valuation to contract signing.

• Time and cost efficiency: relieving the owner from handling every detail alone, leaving them more time to focus on running the company or planning their next step.

Choosing the right advisor significantly increases the chances of closing the deal under the best possible terms.

Conclusion

M&A advisory in Hungary is indispensable for successful company acquisitions and sales. The process is complex: preparation, investor identification, due diligence, and negotiations. The advisor's role is to provide professional support at every stage, strengthen the client's negotiation position, and minimize risks.

If you are planning a company sale or investment in Hungary, it is wise to involve an experienced M&A advisor from the very beginning. This ensures the transaction proceeds smoothly and concludes with the best possible outcome.

To avoid the most common mistakes during a company sale, we also recommend reading our article: 10 Mistakes Commonly Made When Selling a Company.